Please remember IF you are opposed to this ridiculous PP, which in essence will give out "controlling Interests" in SPQ away for next to NOTHING...and a;; those that emailed requesting such a letter please add your name to the bottom of letter, and send either email or fax as shown on top of said letter...
To all those who still insist on foolishly supporting this outrageous PP...sorry, nut there's absolutely nothing you can do or say to stop us from proceeding with this complaint to the OSC...
good luck to all SPQ Holders...
JD*
Wednesday, February 11, 2009
Mr. Jeff Fennell
Ontario Securities Commission
BY Fax- 416-593-8122
BY Email- inquiries@osg.gov.on.ca attention Mr. Jeff Fennell
Dear Mr. Fennell: RE SPQ Resources SPQTSX.V
Further to our telephone conversation this morning, herein I am enclosing a letter as an official complaint of the above noted publicly listed company, SPQ Resources.
There are number of issues we shareholders would like the Commission to investigate/ review, which involve certain actions by the SPQ Board of Directors, (BOD) and Mr. Neil Novak, President/CEO of SPQ which we believe are/may be violations of Ontario Securities Laws and Practices, and contrary to the best interest of the majority SPQ shareholders.
I should like to begin with last year’s AGM, held in June 2008. The current SPQ BOD, had wanted to push through a resolution which would have had the effect of a Reverse Split of SPQ, 1 new share for 10 old shares. The vast majority of SPQ shareholders were never consulted, prior to the introduction of said resolution, and strongly opposed any such RS resolution, as not being in the best interests of SPQ. At the AGM, the BOD was specifically asked why and who brought this motion forward, we shareholders were told that some HUGE shareholders of SPQ requested said motion be brought up for vote. When the BOD was pressed for the names of these HUGE holders, and first denied us shareholders the right to their names,they finally admitted, there was no such HUGE holders, and so they adopted their fall back position, that it was being done because SPQ could not raise funds. SPQ had millions of dollars in the Bank at the time. When further questioned, Mr. Novak admitted that SPQ did not have any problems in raising exploration funds. The final result was, that the motion for the RS, was soundly defeated 70 Million votes against and 45 million votes for. This would indicate some SPQ holdings by the BOD or backers. In addition the BOD agreed to keep us majority SPQ shareholders informed/involved in all future major decisions, that an IR department would be established , along with other measures to ensure SPQ potential/discoveries/information would be properly disseminated to the public, in order to raise awareness. None of the above promises by the BOD were ever fulfilled by the BOD.
We as shareholders felt that this was backhanded and illegal way to have some major party, and/or possibly the BOD members eventually take control of SPQ, since the share price would have naturally collapsed and they would have been able to buy SPQ for a penny or less.
On Feb. 10th , 2009 SPQ BOD made the following announcement/filing with Sedar.
SPIDER RESOURCES INC. ANNOUNCES BROKERED PRIVATE PLACEMENTTORONTO, ONTARIO--(Marketwire – February 10, 2009) Spider Resources Inc.
("Spider") (TSX VENTURE:SPQ), is pleased to announce that it has entered into an agreement with IBK Capital Corp. (“IBK”), whereby IBK will place up to 78,750,000 million common shares of Spider on a best efforts basis for gross proceeds of up to $4,725,000 by way of a private placement.Proceeds raised through this private placement will be used to finance an expanded exploration program on Spider's projects in the McFauld's Lake area.
About Spider Resources Inc. Spider Resources Inc. is a tier 2 Canadian exploration company, quoted for trading on the TSX Venture Exchange under the symbol SPQ. There are currently 316,211,767 shares issued in Spider.
On behalf of the board of directors, Neil Novak, President and CEO
As you can see the BOD is proposing to issue almost 80 Million shares or about 25% of current SPQ shares at about 5 cents, without giving any specific details as who the parties were who would take up this controlling interest shares in SPQ. The
reasons given for this PP at this point in time make no sense . SPQ currently is very well financed, with about $5 Millions dollars in the bank, and very few Explorations Dollars to be spent on their properties at McFaulds since, almost all their properties at McFaulds are “optioned out” to UC Resources who will be spending moneys (McFaulds East and West HUGE land claims), as well as all the numerous individual claims “optioned out” to Renforth Resources, who will be spending moneys, leaving only the SPQjv Chromite optioned 5 claims, in which SPQ has already earned it’s 25%, by spending all funds required early. The remaining funds to be spent to earn the additional 7.5% or so from FWR, require certain studies etc, but there is no time limit. The last set of claims Diagnos have just been recently aquired, and certainly don’t look at this point to be of any urgency/consequence…In addition many current SPQ holders have notified the BOD thru posts, that they would be willing to participate in PPs, so raising funds is/was never a real issue.
SPQ from October 2008 to Jan 2009 released a number of News Releases on their progress reports on the drilling of the Chromite claims option, which were very interesting indeed, hitting what appears to be a MAJOR Chromite oreboby, with potential PGEs and Ni Cu, almost identical to the Chromite ore body drilled/discovered by FWR Res. In an adjacent/extension of said Chromite orebody, which the President of FWR, made comments that the ore bodies are worth in the Billions of dollars, and will be worth even more when these Chromite + ore bodies are fully drilled off. Recently, SPQ announced some assay results through News releases, some fabulous assays drill results indeed, which were suggestive of a HUGE Chromite deposit, along with PGES and even possible Ni Cu, over a strike length of over 2.2 Kms. (will send soon)
Below is a snippet of an SPQ News Release December 18, 2008, the full NR as well as the other NRs will be sent to you separately, shortly. As you can see, the SPQ “plan” for advancing said Chromite deposit is listed below, and all the funds necessary for these programs are already in the Bank as noted above. Please also note the special reference made to the 43-101 report, which would be the “jewel” of this current program, and thus advance in a major way the fortunes of SPQ and all it’s long suffering shareholders.
CURRENT PROGRAM
Spider recently announced the completion of the first tranche financing totaling $235,000. Proceeds from this financing are currently being utilized to prepare the project for the next round of exploration, that includes: line cutting (re-establishing a 2004 drill grid - the J grid - as well as extensions thereto), ground geophysical surveying (including magnetic gradiometer and gravimetric surveying), re-logging of core to standardize lithological units, infill sampling of zones of weaker chromite mineralization. All are needed to prepare a NI-43-101 technical report on the project. The preparation of this NI 43-101 report was recently awarded to Micon International Ltd. a world recognized consulting firm, with expertise in chromite deposits.
Above noted New SPQ PP announcement comes as a shock to many SPQ shareholders, since Mr. Novak himself promised personally to myself and others, in telephone conversations, acting for the BOD,that NO steps would be taken by SPQ to enter into any agreement involving SPQ , without first completing said above noted program, and completing said 43-101 report , so that all shareholders would be aware of the approximate value and extent of said Chromite + ore bodies mineralization and he further assured myself and others that even after said reports are in, he would only make a “deal” that would be in the best interests of all SPQ holders.
Below is a snippet from a copy of my post on Agoracom SPQ of February 4th, 2009 , regarding a conversation I had with Mr. Novak, on behalf of shareholders. We SPQ shareholders communicate and exchange ideas/information with each other through
these superb forums of Agoracom. And, below my post is a snippet from Snug, another representative of SPQ shareholders who had almost the exact conversation with Mr. Novak as I did on January 21st, 2009…
1. Post
He mentioned it will take some time to drill off the Chromite Deposits, and properly prepare a 43-101, as well as Metallurgical studies being done on the Chromite itself as well the actual drilling plans which has been tendered to Micon, to better outline said Chromite Orebody…
I then inquired as to any MAJORS Interest in SPQ, to which he replied…I really can’t say very much with respect to that, the MAJORS know and are following the Chromite story just like the public, and when the time comes for a “deal” SPQ wants to know exactly what there is under our claims, and more importantly, any “deal” that will be arrived at in the BEST INTERESTS OF SHAREHOLDERS….I think this is super news for us SPQ Holders…I suppose that he is reminded of last JUNE at the AGM when a hard core majority of SPQ holders, attended the AGM in numbers and defeated the Board proposed 10 to1 R.S…
2. Post
2) Micon and the chromite 43-101
Micon is working on the 43-101. Neil hopes to have it in his hands by the PDAC conference in early March.
Neil honestly believes that the Freewest Option project "has legs". But he is approaching it very differently from KWG. He wants an indepth review of the data already gleaned from the drilling on the Option. Using this data, he wants Micon to provide him with how he should "drill off" the chromite/PGE mineralization. This "drill off" would then provide him with much more comprehensive data allowing for a "resource definition" - indicated and inferred tonnages.
Once he has the 43-101, it will allow him to possibly do two things. One would be to go after more private placement money, or to approach multiple "majors" (including Cleveland-Cliff) who might be interested in this.
It appears rather obvious that Mr. Novak has mislead SPQ shareholders, by first informing us that the BOD would not act or deal with any party until and unless the 43-101 report was completed, and thereafter, any such deal would be in the interest of all SPQ shareholders, and then announcing this HUGE PP. Now some shareholders have suggested that that perhaps that was the original intent of Mr. Novak, but that somehow the rest of the BOD forced him into doing this HUGE PP…IF this is in fact the case, this is just an alternative “plan” by the BOD to the justifiably Failed Reverse Split proposed by the BOD at the last AGM, where this now planned follow up HUGE PP then would give these very same Silent SPQ supporters/BOD, or friends of the BOD, the increased Control they originally sought last year, but which was soundly defeated by the majority of SPQ holders. By getting inexpensive Shares at 5 cents, via this PP, these individuals would be gaining a real monetary Windfall, since it would mean essentially “control” of SPQ , basically at the expense of ALL other Share Holders, even before the release of the 43-101 to the public, in essence acting with inside information and thus accomplishing what they failed to accomplish when they were defeated by the majority shareholder vote, at the AGM, without having to enter the Open Market to Buy the 80 Million Shares at market prices, like the rest of us SPQ holders.
That having been said, it does not change the fact that SPQ promised to wait until the completion of the 43-101 report, which in our view, undoubtedly would show a real potential for a substantial Chromite+ Deposits, and thus this PP at 5 cents would have never been proposed by the BOD, since the SPQ share price would have begun to reflect part of this amazing Chromite + deposits. Gain this HUGE PP at 5 cents is being done with insider knowledge, without knowledge by the public or SPQ shareholders of the results of the very important 43-1-1 report and is therefore detrimental to current long holding SPQ shareholders., since it would/does not reflect SPQ’s true value.
A number of other shareholders believe the “silent’ purchaser of this 80 Millions SPQ PP, has/may have something to do with Noront Resources, (NOT)wherein Mr. Novak acts and has acted as director, for a number of years, at the same time as being President/CEO of SPQ. In addition the NOT financing which lead to their BOD takeover was also done by IBK Capital, same as this SPQ PP. Another reason they point to is the drilling Company which did most of the drilling for NOT and SPQ Billiken , wherein Mr. Novak was the owner. We are not certain if this arrangement continues, although I did hear that Mr. Novak recently sold some or all? of his interests in Billiken. And so some shareholders feel that this may be a “back door” way by which NOT would control SPQ for pennies, since Mr. Novak serves on both BODs, and share an office floor, perhaps sharing inside information, and thus denying SPQ shareholders the true value of said properties.
I must also add that I personally find it extremely frustrating to find no one answering the telephones or the IR Dept. at SPQ offices, but instead is referred to the NOT telephone number, where Mr. Novak has been working full time, especially recently.
Regardless who the real buyer is, this HUGE PP being offered, has the appearance of an act furthered with insider information, an unfairness to all SPQ holders, without the promised completion and publication of said very important 43-101 report , eventually disclosing the size and potential of these deposits and values, and thus the current true value thus far of SPQ shares.
For all the aforementioned reasons above, I would respectfully submit that the OSC submit these formal complaints to review/investigation, with a view to disallowing this HUGE unnecessary PP at this time , until such time as the official 43-101 report is made public and all involved, including SPQ shareholders and the public have had a chance to review and asses it.
Secondly, and in reference to the very recent precedent setting OSC case of HudBay, it was established that a public Company cannot issue Large numbers of share, in this case over 25% of current SPQ shares, and in essence “controlling interests”, without a shareholders vote and approval, by all SPQ shareholders, specially in this case where SPQ is currently fairly well financed, has access to other financing, and certainly not in urgent need of large amounts of money, at this time and at these prices.
Thirdly the various dubious actions by this current SPQ BOD above noted, should be investigated fully, with a view to determining if in fact this current BOD, is acting properly, and in the best interests of their shareholders, as the law and their duty mandates.
Yours Very Truly:
